Friday, November 20, 1998

Treasury says it's uncertain how budget surplus can save Social Security

By ALICE ANN LOVE

Associated Press

WASHINGTON - The chairman of the House tax-writing committee pressed the Clinton administration unsuccessfully Thursday for details of how the president envisions using government budget surpluses to fix Social Security.

Republicans are still eyeing at least some of the money for tax cuts.

"What do we do out of the general Treasury to save Social Security?" Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee, asked assistant Treasury Secretary David Wilcox at the first congressional hearing on the nation's retirement system since the Nov. 3 elections.

"There is no administration plan," Wilcox said, "and therefore I can't speak to how they could be used."

Congressional Republicans abandoned plans for a major tax cut this year in the face of a politically popular challenge from president Clinton to "Save Social Security first."

Archer said earlier this week, however, that GOP lawmakers would push next year for both Social Security changes and a large tax cut and that both are possible.

Treasury Secretary Robert Rubin declined an invitation to testify Thursday, sending Wilcox in his place. But speaking to reporters, Rubin said his position on the surplus remains the same.

"I think we ought to stay exactly where we are, which is: first address Social Security, and once that's been done, take up whatever other questions people want to put forward, whether it be questions of tax cuts or other programs," Rubin said.

Many Republicans are growing frustrated that Clinton gets more credit in public opinion polls than they do on Social Security, even though he's taken no stand on the program's future beyond the general demand to set aside surpluses.

"At some point the president has to come forward with a program," said Sen. Phil Gramm, R-Texas. If Clinton doesn't, Gramm said, "There are going to be many people who are going to conclude that this was just a ruse to keep Congress from cutting taxes."

Lawmakers questioned Wilcox for two hours about Clinton's intentions.

"Can we get some specifics?" asked Rep. Bill Thomas, R-Calif. "This campaign rhetoric mode has got to end."

Wilcox said Clinton fears that sending a specific proposal to Congress might simply encourage lawmakers to take sides, making compromise more difficult.

"The president will put forward a plan if and when he determines that it would be helpful," Wilcox said. He added that he does not expect immediate results from a White House conference on Social Security, scheduled for Dec. 8-9.

"I myself would not expect a two-day conference to yield a solution," Wilcox said.

Clinton has consistently stated his intention to begin nonpartisan talks early next year aimed at fixing Social Security, which Wilcox said "the president has indicated that he expects to do ... without an increase in the payroll tax rate."

Other options include raising the retirement age, cutting retirees' yearly cost-of-living increases or letting workers invest some Social Security taxes from their wages in the stock market.

Without changes, experts predict Social Security will run short of cash in 2032, after the nation's huge baby boom generation retires.

Neither Clinton nor Republican leaders have endorsed a particular course of action. In the past, Social Security's tremendous popularity has spelled political trouble for any who suggest change.

"Without a specific plan from the president, a very difficult job will become much, much harder," Archer said. "Some say it will even be impossible."

Senate Majority Leader Trent Lott, R-Miss., also has asked Clinton to make the first move.

Democrats criticized the Republicans' approach.

"I don't think the way to achieve a bipartisan result is to maneuver as to who goes first," said Rep. Sander Levin, D-Mich.